Time is running out on a tax planning technique that can reduce 2023 tax return liability. If a taxpayer qualifies, they can deduct their contributions to a traditional IRA, but the rules are tricky. Background: The maximum amount you can contribute to a traditional IRA for the 2023 tax year is the lesser of 100% [...]
The new SECURE 2.0 law creates a band-new tax credit for small businesses that encourages retirement saving by spouses of military personnel. Call to arms: A qualified employer with 100 or fewer employees last year is eligible for a $200 credit if a military spouse participates in a defined contribution plan such as a 401(k). [...]
First, Congress approved the Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019, affecting qualified retirement plans and IRAs. Now the president has signed into law “SECURE Act 2.0” as part of a spending measure. Following are several key provisions in this new legislation. RMD age threshold: Generally, participants in qualified plans and [...]
A Section 529 plan is a tax-favored way to save for a child’s higher education. Now the new law called SECURE 2.0 provides an option for using 529 account funds for retirement savings. Background: Named after the tax code section authorizing its use, Section 529 plans are educational savings plans, generally operated by individual states, [...]
The Department of Labor recently finalized changes to the definition of a “large plan” for Form 5500 reporting purposes. Of course, qualifying as a “large plan” can require the plan to have an audit resulting in additional expenses associated with the plan. The changes will take effect for the 2023 plan year. A large [...]
Is this the year you finally convert to a Roth IRA? It could be if it makes sense for your situation, but there are numerous factors that come into play. Do not make any rash decisions. Basic premise: Generally, distributions from a traditional IRA are fully taxable at ordinary income rates reaching as high as [...]
If you are an employer who sponsors a qualified retirement plan, we want to remind you about the requirement to restate your plan document. Many retirement plans that use plan documents preapproved by the Internal Revenue Service (IRS) must be restated periodically to reflect recent legislative and regulatory changes, in order to maintain their tax [...]
Highlights: The 401(k) deferral limit increased to $20,500. The FICA taxable wage base increased to $147,000. The maximum plan compensation limit increased to $305,000 and the maximum annual addition increased to $61,000. Indexed Plan Limits 2022 2021 Deferral Limits 401(k) Plan or SAR-SEP $20,500 $19,500 403(b) Plan or 457 Plan 20,500 [...]
A SERP may sound like a creature from a science fiction movie, but it is actually a popular retirement savings vehicle for the top brass. Typically, the SERP—an acronym for Supplemental Executive Retirement Plan—is used to complement a 401(k) or other qualified plan. It offers generous benefits to a chosen few and enables an employer [...]
As you probably already know, there are two basic types of IRAs: the traditional IRA and the Roth IRA. With either one, the deadline for contributions for the 2020 tax year is May 17, 2021 (extended from April 15, 2021). There are no further extensions even if you obtain the regular “automatic extension” for [...]